Allowance app turns children into savvy shoppers

Technology can help youngsters manage their money as they learn to be responsible consumers, says Dan Meader, creator of a web-and-mobile shopping app called Allowance Manager. “With the best of intentions, parents say: ‘We’re going to give you some money so that you can get some essential firsthand experience with it,’ ” noted Meader. “But then we neglect to follow through and give them the money.”

Allowance Manager offers an alternative, he says, to both the flawed cash model and — what is perhaps even worse for the parent — the practice of dropping the kids off at the mall with an adult’s credit card in their possession, Meader says. The basic idea, he explains, is to automate the allowance process through prepaid debit cards called AllowanceCards. Parents use their laptops, phones or tablets to set up regular deposits to the debit cards, and then the youngsters access the cards to spend their allowances at malls and stores. The app tracks debits and credits by email or text. Meader, a former Apple engineer, calls his concept a beneficial exercise in financial literacy for these young people.

Meader created the app, which now has about 200,000 users, at the suggestion of his own kids, frustrated with their parents’ tendency to forget allowance payments. By analyzing user spending patterns, Allowance Manager identifies those retailers that are most popular among young customers. Some of these chains place stickers in their windows advertising the fact that they are “favorites” of Allowance Manager users. “In exchange for that, we place the retailers’ brands — their corporate identities — in front of those users when we send out our weekly summaries of activity to our entire user base,” Meader said. “We just help each other by giving brand impressions and exchanging goodwill.”

Watching his own children use Allowance Manager, Meader says he has been impressed with their savvy use of the cards. When Meader’s 11-year-old son needed to replace a video game console, he worked hard to find a used system on Craigslist — and drove a hard bargain with the seller, to boot. After all, Meaders quips, he knew he would be spending his own money.